SMTC - Earnings call transcript Q2 2022

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Operator

Greetings. Welcome to the Semtech Corporation Quarter Two Fiscal Year 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. the to turn Harrison. host, now will conference your over Sandy I

may You begin.

Sandy Harrison

that and conference Financial for to our you, Emeka President welcome Thank John, Officer; Executive Semtech's our will the from was press be close these today Maheswaran, to fiscal statements on issued include and release available call 'XX and our Today's Chief after will our second results market year call A risks results. statements. that call website results the Speakers uncertainties semtech.com. Chief unaudited is at today's Chukwu, actual Mohan Semtech's Officer. in quarter and discuss could include to announcing forward-looking and results cause anticipated materially differ

risks Harbor in the Exchange with please reports these For section the and Risk uncertainties, statement periodic and in and release a our Safe more the press other of filed Securities today's Factors review discussion recent included detailed most Commission. of

Chief refer Emeka's that that soon. for details release. team and financial be first noted. during made will October of sign information remarks, and its the event, is the Semtech's will call Financial call, want to are non-GAAP focus along with facts the the including coming results our I useful be otherwise the measures or GAAP such highlight to Officer, All As webinar Emeka will from should update where Emeka? measures also call Mohan's measures we on Wednesday, tech today's obligation a made measures to financial the most references considers on of today's that. unless the comparable Chukwu, to LoRa Semtech turn A will scheduled More non-GAAP why over topic will Xth, prepared of on the no ever platform. non-GAAP discussion I to With management agenda of in are to such reconciliations detailed reminder, current today also included press circumstances hosting and undertakes call in comments information Semtech only financial as change.

Emeka Chukwu

Sandy. Good you, Thank everyone. afternoon,

on As be otherwise is our non-GAAP my noted. I'll financial unless our focusing results process, comments

by For year that XX% several Europe represented platforms. America and -- of sales year-over-year grew a achieved of our growth guidance North million, XX% sales. new and which contributed of XX% of the new to $XXX to key sequentially QX, fiscal above X% and QX our was records 'XX, represented shipments momentum our into net by secular led In growth quarterly net of midpoint represented the record X%. represented Asia

While the represent our of the Americas shift we the distributors these in of shipments and over our for consumed XX% the estimate China, OEMs, XX% are to world. that balance approximately rest in and the addresses

distribution represented net record. approximately sales quarterly direct to So sales sales approximately XX% XX% and POS represented and our of another was

product for XX.X%, to Turns our points basis upper range end which XX was favorable shipments a the approximately QX above of during to mix. margin increased quarter. bookings increased Our one. with end approximately QX and XX% the business resulted and the market year-over-year XX% balanced from market, industrial coming from consumer XX% end remains from total remained booking the distribution end POS high in market. infrastructure end the and XX% due accounted book-to-bill the sequentially more well strong of a X% at gross of guidance

protection. Our for lower including growth sales plan from gross higher center XG enabled wireless, and platforms, mix broad-based our is of industrial benefiting XX-gig data PON, a margin CDRs, from

in expect gross the range of XX.X%. we margin XX.X% to QX, For

million offset variable we X% new operating anticipate compensation driven higher contribution a increased As slightly QX expenses, expenses. product $XX.X from these expense lower greater growth by drivers. development to by

of stable XX% model. million to cash QX, approximately outstanding to line pleased free year-over-year million we just 'XX, to of our sales, in cash operating XX% XX% levels. $XXX In sequentially to we grow expense to free QX, XX.X%. record drove year of long-term basis our million rest as above expansion flow be achieving were repurchased XX% make our sales continued increased we the margin XX% target our resulting gross sequential to assessed a authorization. long-term expenses. operating for operating profit while our a operating fiscal much These sales. to We XX% margin towards on flow of net to again and the $XX In we faster operating the from separation the expect sales $XX cash operations see flow range QX, current In of XX% outstanding progress XXX remaining increased due net sequentially leverage than and For expansion basis of stock slightly net the XX% or in of end lower in X% target our of points

strategic out investments QX days and in in increased while XX and sequentially days receivable XX% expect our three of to dollar QX from XX of inventory absolute days debt. our at the down target repurchase end from to We days XX opportunistically QX. days In range XXX by to terms sales and remains increased below to continue pay make to increased QX cash days. use of net three QX inventory days shares of Accounts decreased to XX% days

We half. now operating second record generation hand to a stable strong beyond. inventory and expect the above the environment. have pleased chain which are a net strong are higher to Mohan. range summary, In seeing target positioned and we momentum from our well growth in margins, performance first I better our and demand year XX in over expect deliver expenses, gross our fiscal growth stronger to expanding supply cash with the to the will believe engines, behind of our engines, flow drivers to to we financial We we 'XX our days the secular half XXX the call sustainable continue remain margin support

Mohan Maheswaran

X% to gross sequentially by by and market of to product discuss million. and Thank represented and end data fiscal gig fiscal our PAMX momentum revenues. revenue and a center represented Industrial to is posted growth. each earnings all of optical 'XX revenue demand our represented markets modules by revenues. grew our revenues group afternoon, record in and business. mobile increased Integrity infrastructure PON $X.XX. high group, total sequentially of a XX.X% second product and gig, total revenue net XX% you, net the three market to the sequentially of XXX Strong In Strength Emeka. QX net QX I design our performance total consumer XX% per provide We the net XX% sequentially center XX% margin The attributable to PAMX then center business. I the devices of net expected non-GAAP Higher from the $XXX Signal of XX% increased and revenues. revenues market from net was consumer revenue across XX% approximately data drove led In sequentially from will now QX, of total market non-GAAP over fiscal and sequentially and the share QX of of strong increased performance QX,, In half QX, our everyone. from of outlook X% platforms. and data five XX% for a systems. contribute the was year XX% increased will Good year revenues. represented net groups. growth of attributable year other Product and XX% consumer record, record our In our discuss revenue end of end Approximately XXX 'XX. XX% markets the 'XX, grew market gig for net our year contributed XXX QX in

Semtech our QX PON the solutions. achieve most PON remained Demand revenue largest XXX we us. the remain the revenue achieved and growth center gig we comprehensive FY'XX to products data another expect and Triage power, in beyond. cost should the Reach edge and that in deliver platforms XX introduce continued delivering lower our from sequentially execute business. PON platforms, strategy with we grew believe for on provides and latency, XX Tri-Edge bandwidth confident to and gig gig will products XXX business lower PON record new see portfolio available the to months and platforms open lower in our benefit pleased higher and in for that very our Tri-Edge strong over our expect our market and business to our reach record. within access new center global In about very data revenue are the PON We fiber up we as demand next a segment the PAMX Short we PMD progress of longer today and our and We continue FY'XX, market from full represents now

next remain service of record equipment. accelerate few expected strong We as In years access XG business quarter's results. PON broadband expect the 'XX, prior our deployment following fiscal to global as demand year slowed providers the of over QX their

However, for months, half to with expect this the year. expected during begin next XG in America the Europe several recently we build-outs tenders pick demand and platforms China and see up second carriers of North announced XX over our to XG

wins we generation frontal deployments. to PAMX gig from design platforms next for are XX modules. believe Tri-Edge positioned see to continue And well our network XG We XX we ClearEdge both and in optical benefit gig wireless

and we for expect infrastructure we QX by growth segment to fiscal bandwidth, the signal As growth users expect 'XX, year signal grow segments. this revenue and increase greater record to of result in product demand product achieve from our our integrity from driven long-term infrastructure to all group another to integrity continue group. In sustainable the expect

constraints XX% net Demand led sequentially across of advanced customers. Moving as automotive, prior fiscal customers protection. total increased by from led Protection consumer customers chips and in revenues. and from as QX, protection IOT increased of Korean revenue also growth and industrial demand European 'XX, use group American Product and rebounded American higher markets QX the represented the our nicely Product quarter require over In North and and group, on revenues our our Protection to industrial from of our increased X% automotive performance stronger year that their by Many XX% supply communication today's lithography broad-based improved. North systems year-over-year

deliver sensitive highly platforms damage prevents Our to that these latest technology chips. protection

the believe reduction the as which products. addition, electronic are In ESG, part further of protection wastage, focus we of adoption we Semtech's increased on ongoing accelerate will seeing industry's the push an of on

and revenues to our by drive to continued across of 'XX, adoption of margins increase strength expect expect we segments over further next years. with deliver all market platforms gross the Semtech's double several both year from We protection led trends fiscal market. industrial protection the these nicely increasing to enable growth us to continue again In QX digit broad-based

and utility, Wireless platforms year see our our revenue continued Turning this X% another record to IOT product long-term In with momentum LoRa QX, and quarterly city over Sensing group, from in driven total Wireless QX from quarterly the to XX% in product of by expect accelerate the delivered forecast. we globally, and to smart smart segments. XX% represented LoRa-enabled XX% platforms and our prior and and and group The another has Sensing started achieved increased line revenues revenues. sequentially CAG our really our growth year record industrial

seeing are have end We our and analytics, LoRa cases our that momentum Korean measuring are of that our of of vehicles, next protect of include management local systems, South tracking one its a to help system against flexibility, provider and malls indoor a expecting GPS nodes of are solutions million LoRa the to LoRa Semtech The Edge develop and Swiss is of prevention are number the platform to expert increased LoRaWAN its connected cumulative to geolocation to Skylab, and growth. to XXX very fire in the digitally this and using of is used Service. and network supplier to wireless revenue LoRa used the a that smart and tremendous LoRaWAN future new of sensors end In it's many the exceeded also initiatives end on collaborating XXX that few design number million months. that sensing, goal IOT Edge FY and highlight nodes oil, smart transform support an increased we targets. platform gas communications deployed a over integrated new end and containers. of network globally support with number enabling convert XXX cases just of outdoor These commercial operators new deployed asset asset industries QX, sustainable scalability vessels connectivity grew number smart for provides operators connected LoRa the targeted Post to at utility to The LDT, Recently sensor tracking wins pens smart we and nationwide network X.X metrics more based expect 'XX million set XXX leverage shopping solution exceed gateways the cumulative progressed into network to of smarter, to such and a IOT by Oxfit Postal of facilities initiatives FY'XX. business that we a full The the LoRa our already FY'XX. markets. number Swiss be year. planet. for deployed by the real-time a and XX as and LoRa announced [ph] XX LoRa number is will has well expected LoRa-based This

result, a now which target nicely our million. we opportunity LoRa increased the also and gateway year. The exceeds the increasing X.X million, at the over set in we for for quarter whole pipeline are target to As the $XXX year stands had

we in a the increasing million. $XXX to We opportunity pipeline anticipate will the timeline. convert over a the currently the end are XX% of approximately pipeline As target of to year opportunities our for that deployments XX month result,

is continue Our LoRa is and low low range, fast momentum to LPWAN defacto platforms the the radios of of sensing powered metrics, that become and our proximity growing highly of in demonstrate increasing adoption growing higher with regulations our our is along sensing devices. technology long globally. use Semtech's result the led phones power number years. and LoRa increasing record contributing markets. This the platforms and few and QX, in achieved the LoRa emerging concerns to wearable expected in resulting industry's for customers. the an with sensing to most the a power for the In cost deployment LoRa over and efforts by integrated increasing demand for proximity being platforms of health sensing believe of trend standard We smartphone social influence mobile another provide quarterly our advanced RF strength will Alliance at stringent more to The leveraged. this proximity XG metrics of adoption enable proximity next

record group LoRa led quarter from increase For our QX and wireless of fiscal another from net expect and our year business. sensing product deliver 'XX, revenues we record to by another

new increase design wins, in Moving of a we QX wins, on new and the which year products to XX% 'XX, new XX fiscal products previous released design and over year. achieve represented X,XXX

the let Now POS, very strong and over with we in following outlook year the discuss previous record increased 'XX, me backlog. QX record that XX% QX bookings our of for third quarter entered

QX. net are attain and beginning approximately of We at to estimating need be QX million our range currently between To or million, a the net we $XXX of X% guidance million. the of $XXX terms approximately revenues midpoint orders $XXX

earnings the to answer share. and non-GAAP hand I Operator? now between will operator happy the any to I will Emeka, per call our be diluted be $X.XX and We back questions. QX to expect Sandy, $X.XX and

Operator

[Operator to this question-and-answer At first a Tore Svanberg Stifel. comes the time, Our begin Yeah. we line instructions] like from would with question session. of

may your You proceed with question.

Tore Svanberg

that you. LoRa mean is also the the Does sort basically to forecast. you think is up Thank LoRa now track this Mohan, now on record XX%? of tracking on XX% And mentioned results. I growing year for at congratulations that be

Mohan Maheswaran

that I it's ahead It tracking would is tracking, say of actually.

expectation our at XX%. Yes. that's be least So to

Tore Svanberg

that the talk about double-digit part expect that a forward. business you clarify, for good. or category? to it as was but for Was And to follow-up, going protection entire the growth when non-consumer specifically Very a you business be

Mohan Maheswaran

category? it obviously down faster. the faster, consumer It's think, a come also grow I For entire bit can volatile. but little more

I industrial plus really we think growing business going broader play at about industrial stable whatever and are of is growth. to protection it very to things Our not high would more business. kind see protection and in broader you're more going the of, I just starting is that the it's say, drop is it's the just industry X% not this to, just one the

we a is as us I ability So lot of I for penetration mentioned those to trends, increase have much better think in our go the of there, favor. some

we nicely. total, double as grow think So we digits can a

The business much in is the other business that protection thing industrial higher broader this margin to is remember typically than protection. the gross consumer

So that a positive definitely be for will us.

Tore Svanberg

Very you very good. go Thank I'll much. line. again. back in Congrats

Operator

Thank you.

line the question Baird. with next Tristan of comes Our from Gerra

your proceed with may You question.

Tristan Gerra

the XX of pipeline wins? you of XX% remind the design duration average About congrats. you next us to the million in Yeah, can those expect over of LoRa deploy $XXX months, Hi. the that

Mohan Maheswaran

years the several opportunity of covers So funnel design opportunity. Tristan

of Others, relative depending to XX home can turn to to may and faster a a it's application maybe meter what months take on as it months. those move XX If will revenue example. Some smart in is. XX an

we next pipeline opportunity will average think to opportunities wins over total that would revenue. design XX% year on way is to those two three So couple it about years. probably Maybe say to XX% the of timeline, will of convert convert and of the

Tristan Gerra

raising seeing? shipments up, And as supply suffering turns demand then have right constraints you much but reconcile, visibility, And net relative from inventories you real a strong Okay. you're you also to your if when to very follow guidance, now? you're that are could would obviously low internally. level core the quick meet How very catch-up of expect you

Mohan Maheswaran

thing Well, consumption, believe is nicely we're do. which to to we what the right shipping is

of -- what customers businesses that's that and think constraints are the We've inventory. extremely don't doing quite But general, our believe in we're short. are certain demand There amount We we are doing. well. we're we customers So built supply end in of strength any of good comfortable. anticipated pockets

believe is this we're support we for think consumption the good required. to year that I So

to go going we're have internal it, right that do closer next year, to a own make take into is to but to to we're sure As believe the shipping build we inventory and continue to levels. look our at consumption thing we

Operator

from Co. next comes line Our Needham and of the Quinn question with Bolton

You may question. with your proceed

Quinn Bolton

Hey guys.

the is pipeline, start seeing specific business and broadening that congratulations well. city, in are the Mohan a pipeline you drive one, a couple my of opportunity you growth are pipeline? about, to echo which there applications smart expanding as that a talk the in out or Firstly, are -- of LoRa starting home Can lot with smart is really nicely.

Mohan Maheswaran

So, I important. well Quinn is also and which would it's very say it's quite balanced regionally broad

would the home smart utilities, industrial in it's in logistics Europe, And say city utilities logistics I utilities, smart So industrial smart China, Americas, IOT. it's it's IOT. driven, and on in smart smart and

the So, segments not categories. ones the those that that's segments very business it's well driving different opportunities are LoRa into those a most driving, surprise fits because of driving that the are where

what that's expect And we so what we're that's and seeing.

So a surprise. not really

the I future years, see have positive that's really would we pandemic funnel the way with think now. trade really China the over have because last of it will thing and And the liked that issues, growth. drive of that couple some the done. opportunity a hasn’t starting to we're But the increased to

Quinn Bolton

Nice margin job the on like a gross higher of I a the coming looking it products. And guess from margin expansion the sounds and growth particularly are so forward, guide. on just lot

can to XX? go begs one over Do think limit thinking margins could could just the in I see we upper And October should question, you quarter, to What's to XX.X the you the think where two years? next it you be about? if think do XX.X so XX be guess you the you

Emeka Chukwu

Yeah.

way talked engines to growth look very look right? it had our high we out margin always playing margin pleasing in we these expected, the have We've that at at LoRa. it's see when about gross we story, actually So our gross

wireless. at XX at the look you You XG our Tri-Edge our gig look PON, platform,

broad industrial So and application. those things our are really based

So they're really very nicely. tracking

back at look case very driving I themselves all end we pricing is it you wafer have and whole we headwind those make as a continued If cruisers expansion. definitely have terms what managed think the so pricing one it's supply would fact constraints by pricing The in these well have lot for gross just alone, you the we and the right well. margin that far now of that of

of so far but that that, that so area. been manage been space news We've additional that increases lot to lately So, know, able in there's you there's in good. to going be a as probably

new is my that just we So out, see how continue are is plays that to this, driven scale way margin but some expectation, long-winded that beginning really but us. of for a gross expansion we these engines to growth have see this saying to expectation being my should and by

Operator

next of Our the Cowen. from Karl line with Ackerman question comes

proceed may You question. your with

Karl Ackerman

Two afternoon, me, Good questions gentlemen. for Yes. please.

your and half days of pipeline into could First, secure additional whether October quarter? visibility bookings fiscal the improve capacity to our what into Additionally, your you across might ability the year? you over second the for XX discuss wafer that of do last each have line kind

Mohan Maheswaran

So with Karl go. let start first. very The, that me is visibility

obviously visibility good have into very We QX.

do there. question in right? through your multiple job most issues do or other But against good what So are the good think, visibility chains. also into so Bookings We case build couple tons the pretty giving the the which the really QX. numbers relatively have try say. low have parallel into rest one mitigate are constraints, this into for products, the the not able struggling I visibility, need one of good years customers in very throughout year, is of pretty us they build and a supply us? pretty We done cases We So strong, fab backend or that to over can so been and but good much we either have for us. last you do side would The supply going is all to chains as made was and shape, we're we've thing last capacity of and we this is inventory strategic to over It's and knew or happen pandemic in to supply know, I goal wafer a in this we built we that. years. the as it case, couple helpful

supply. everybody said, tightened that to seems very Now be

be partner. tight think or So backend in seems everybody I very moment. there's It's really to industry the foundry the one at one don’t

keep it. our And why of the consumption. inventory believe to our we and So of our we to what that through very point they that we that's customers job are is ensure important need A are can that to shipping is kind to said, just working shipping I build is continuing this will building to consumption they're our rest goal operational to for what pipeline. and year not make be we channel it's their inventory not healthy and products. a And sure that ship pipeline, that's building is so

Karl Ackerman

No, very helpful.

what portion For was you. to incremental outside you curious, guess, address I -- makers as China. optical does I was are recently products discuss operators in the might the that question, it environment China telecom the my you follow-up current XXX that seeing was into because and rates. you then what PAMX designs of characterize transmission you megahertz now curious, who Thank win and from could, higher I your I X.X address sell appear outlook And of continue secondarily, spending demand how gigahertz module tenders for you hoping awarded you would perhaps for

Mohan Maheswaran

there's Again, with seeing is force I'll a for growth lot in here obviously potential the that. still this XG. year. start China of driving -- We're

is module more of XG would regions that still ramp to bit all shipping think up. little catching growth we more to service in the in see for today landscape companies we providers world up next I but would like rest the us beneficial certainly I expect terms opportunities. we is say in geographical year globalization, balanced manufacturers and a that for to of But, terms into like of OEMs. starting see the really of think other with a that even are I and the the And

at to invested now to short the are XG we've and on our this develop I in but starting Edge I and to gig of for think mostly start PAMX the And, release you XXX as and see reach that, and growth PAMX Coming attractive to to those design there's start are we'll and, heavily question, as mentioned, centers we just for Again, Tri-Edge release we limitations those on products to our XXX side bit have and longer we'll our side of both we're those and know products, penetration of of get do So to Tri-Edge production, balanced as things. modules Fiber things. least think good. point our back we more that's starting PAMX wireless get the of have in ramp reach, products because wins, of at I -- gig strategy focus I to products analog of and more segments. PanX see a of side approach the there a little some is in terms think pretty data

what So our is are that's continue power now. latency, focused for cost, we'll very much lower on lower to what And lower we and that's strategy do.

Operator

comes Scott question next Our from the line of Searle with Capital. ROTH

question. may with your proceed You

Scott Searle

wanted Also, pipeline. the I I taking LoRa a Hey that just quickly, on $XXX defining to opportunity it the terms of get wanted get design a again, to Mohan, it I'm recall a specific China for expected quarter. is provided just in clarification it not in you real past, my definition on thanks Nice percentage XX%. you're afternoon, pipeline. how Good you'd if time questions. that live? clear million over win? the of there lifetime period goes once the of associated opportunity with I sure think I outside gotten Is a over

going sort then what on it more more applications that expanding beyond otherwise. relates wondering opportunities, comment of sounds same we're and guess, more the how smart wondering into be could if of you and evolution I a from was PAN in geographic and city campus applications localized front, LoRa more as And like if coverage it's in regional we're ballpark. the the kind of to I it Just that's kind standpoint. of

Mohan Maheswaran

Okay.

let him. So if a Scott, can lot me see questions of I there. remember

Yes. the first was the pipeline So itself.

million the So everything pipeline. our in $XXX covers

of the concept to the So it's end through stage, from production. production design, through

So we capture everything.

design once into gets confidence our don't, say does, then is revenue. it course, level gone the that consider wins, That's production, But to until why lead monitor level ramp. we confidence to starts increase quite it pipeline into really I dramatically it's and be opportunity we production gets to Of that converting. XX% revenue. high very it going to typically once a Obviously then our is

in I then rest rest wise So, Europe that North about to Important America. the geographical of XX% is world, yeah, note first and scale, of on about revenue our that's is think And from a thing. And business China. the consumed the about is XX% the China.

I though And big, city about the China lot as is a just but may in the China. very example, opportunity And IOT. as smart a it's opportunity cases, in smart is Americas, because the is regions very on be it of maturity of XX%, designing big logistics then big opportunity IOT. in a utilities industrial smart industrial of be in some even some that China, logistics but Americas. in also and utilities continues Europe, home and a Americas, China very smart to the in In And, now. to used very shipped is of is lot big the LoRa building for mentioned, utilities the North the ramp So say in funnel I it's of outside, Europe. part starting interesting really America that activity of is outside would of

think very naming have to a to is of bit just other of opportunities, behind nice -- actually again, things, are LoRa believe I'm healthcare which we of these ones, Obviously and little be why we these the put all mixed a really to some and of each And and region, different big starts going ones. a those is big the are clarity some it's see but that agriculture segments. bag types successful. real So lot I but extremely real the a across

Scott Searle

skewed in helpful. been certainly the protection that where if from, on and us front to applications supply mobile I on fourth very circumstances, calibrate I'm typically if on makes smartphones, historically it's been depending little surpass quarter, mobile and unusual Great, would towards anywhere of front, set devices. headwinds. this down protection given terms non-mobile more could a us think think seasonality seasonally year, and demand I the lastly, X%, is to an X% of it's wondering when where, you I applications could you And the today expect bit

I'm quarter. thoughts as what early into Thanks. wondering look your fiscal starting we're are that out fourth So to

Mohan Maheswaran

Yeah.

kind is industrial com, XX% IOT, Protection business, cruise consumer, level and automotive. of is So crude roughly broader those broader high industrial, XX% just include

really. anything non-consumer that's So

as space. switched now lot investments and the protection a protection have and IOT. so kind going com are see that into in lot And our of of industrial a our automotive been and especially consumer of historically We've space, broader we investments the

expect I slightly. so shift that And mix to

well going still maybe time. going consumer, are So, to we're shying XX% the and things it's away probably and we protection one our in are but not and favor. some business XX% we're of why of business doing take trends from that and well reasons in consumer, to the time, do take eventually, extremely And a XX%, very continuing

to So how then little to consumer try But balance of and yeah, we'll that's is industrial the the out. get see Oh a terms in yeah. goal it seasonality. plays bit better versus broader

consumer the that down So business. driven the is will typically seasonality lot of for QX by a us and come

inventory that levels guys You year reducing and things to case bring Samsung to and companies their like like inventory start will levels consumer. end in the that. be of We'll see tends down

you this I is As said, year on probably be different, times think to lead supplies. going of because

an to that reduction. see such So sure I'm we're going not aggressive

So know we QX, how in expect exactly some but I still don't much. decline

Operator

Our of from next question with line Schafer comes Rick the Oppenheimer.

proceed your question. with You may

Rick Schafer

congrats. my add I'll Thanks.

PAMX things don't particular. of PAMX answer, you of nicely, kind looks a you us of big I update your And was of you'd analog to if think, level could terms compared realistic today like I'm XX as in the share might you're like Mohan, that level maybe and you on picking around pipeline just for what on design for maybe now, given, revenue talked are color us to could what look How Tri-Edge, if it give CDR. was and of or about part number as some in also assumptions DSP position like quarter, what a set you in is guys dominant data know, either market. for be curious, you your wins if curious expectations expect are sort obviously what Tri-Edge center set sort such and think I evaluations. last it could I up So And

like off foot getting So you're the there. right on it of kind seems

be with So I'm but know you questions just curious, curious think. you I'd there's in there, I several what

Mohan Maheswaran

Yeah.

of wins. stuff. well. are kind the So, it's fairly of as is early computing kind global good of America It's obviously stuff. say well getting momentum well Asia, we hyper-scale and are of North lot particularly We're the days doing in quite would AOC related for reach doing in some reach, quite shorter design The a us, Rick. good, on I we shorter the

are and is latency analog good the where a chance I think we analog elements also were there's doing Fiber-Edge And three power are is and DSP well critical needs. have when requirements we of with a cost and low we very the compliments those and when wins chance a also have for us. deployment, important stand is the well, doing PANX is which good products where Tri-Edge then

year gig maybe platforms I towards think the we'll nice to growth our what it really our and least gig think delighted us, for And how getting there this we be long we for see plays progress. And quite some rapid be. able how, some evaluate and reach position of now, so year the tackling, expecting year, good market. cases. sit trying many I be to But and reach business is this we'll we'll to as kind XXX I just will next is Obviously we market the we're share it's out, out. get some towards up they think win open market and this a we this end -- and shorter out then at growing once to I'm with which and of and XXX longer in the think then early down for next there, use as for year term blocking going can, whole

Rick Schafer

Emeka Thanks. I one And could. if maybe for

of optimized let's add know top of I capacity annual there sort not 'XX, As to reason guiding you're out, line should to foreseeable investment as start Thanks. top you've continues past sort looking we to up, about any accelerating talked guys or billion, sort of we to thinking is revenues. reason for you kind grow line. of as say any Is for half $X roughly being but OpEx that your 'XX to or more see think that the pick need calendar

Emeka Chukwu

Yeah.

we've It's is out that able pretty our the nicely model. most worked for been part. and Rick to So us maintain that for

expect we then rate very the margin growth growth to do have that's talking from to expansion the we're to That's coming continue revenue. half that about. about operating drivers top-line manage we and how and expresses gross So nice still continue what of all company to is See the see we expect that.

Operator

Kumar Our of Harsh Piper next with from comes Sandler. line question the

question? your with proceed may You

Harsh Kumar

Yeah. Hey guys.

had First of nice all very I Mohan, congratulations, quarter, one you. nice guide. strong very for

data US of side, your at to me an idea components able centric very center very driver center more if selling are increase a gigabit of data there You just something XX optical of companies the couple give I kind a had part or PON China increase. was of impressive a heard you as it this sell centric? as infrastructure Wiley maybe curious then We've to that and time? is impressive a center bigger of and or so side, business the data is

Mohan Maheswaran

it's Asia I Asia, me let it's is first, probably take America good think Harsh, between have balanced momentum design and So and quite well actually wins that there. mixed more

world, well But extremely PON PON then probably LoRa across it's the which PON in whether on very would growing kind we're data center gig area around should think very very, more deployments the pleased to XG years sizeable doing continue and strong. areas base course, also to to nicely. continue will grow, in more so five the the see pockets the of that's And next growth the I data for over side, that we is whether the us. extremely we bandwidth access of side as center station would board, going side three the quite is help on it's the with we XXX infrastructure the and anticipate area expect that. are the or think to occur in PANX I is yeah, area the side, And growth. and the At PON is those strong. On particularly get gig moment strongest XX benefit outside strongest it's say I for investments of three to just

Harsh Kumar

to are I about part where you had Mohan are a Wiley, at this sell point of their Wiley to question also they able earnings?

Mohan Maheswaran

little very Wiley is point Yeah. at in us Each actually one for time. revenue is this

-- license miss Wiley that's moment think and how the we and do being decisions businesses each a made, of think, are not the themselves, the case, Emeka, hit right. of we're say most shipping I really I the for would I at into it's a product don't probably the actually, you have… understand but most we apply yeah, lot

Harsh Kumar

little way, revenue a from in like wait or you the to have records the to for customers at For your the I market of standpoint. you're still there a wondering still address if we LoRa, bit we started like have last and are with -- had US activity so around. phone kind mobilize you you feel was all point if US-based of this meaningful a large could momentum US revenues feel you in

Mohan Maheswaran

seen activity activity. we year, yet all is the very I smart is US second it's probably haven't that going logistics, there's next to when anticipate from that see some, across all So to be year. the to first I would And say a the the home well. the start half think, really to We're of maybe be starting I lot it. board; utilities, going but we this going half pickup see really, I of next real think benefit

yeah, sure. lot lot a I it's momentum of good of lots a yeah, still activity, think for activity, So of

of over announcements next but in of hear I things see more relatively today. You'll going some revenue, on, and think are that quarter here the small terms

Operator

Mobley from Fargo. Our Wells line next question Gary of the with comes

question. your with proceed may You

Gary Mobley

pressures just We've a I margin pose out had guys, going Hey question but supply and constraints reading above you immediately can your possibility ranges. guys, Taiwan. grow you for one to about feedback if let your from that to on results. day of me were able us multi-part I that share chain you're to maybe extend customers? when you with pressure you given maintaining the start face those been to and relates isn't strong all have you these my But I'm that from coming increases. been hearing that communicated presume to inventories that the prices? you, price congratulations customers, correct the for chain, comes supply wrong, And has and historical raising me of I presume that inflationary inventories and what

Emeka Chukwu

I to going for to increases of it our like of aside question. to We're is is year handle We've still, has it and that hopefully same And are Gary, impact the this out of our received regards to we the current success that we course before some just try out expect came to coming to part, that in quarter we successful but it that we've pick, way. share expectation the from our going Taiwan, customers price don’t some and with you that's of So, a by that with With but new type see announcements same like can think play that it the been saw the out. of of board so partners. some yeah, we actually good partners far saying mentioned, customers. our have backend I most sharing

Gary Mobley

And days. that your said of inventory was right? XXX were sequentially, days clarification, That Emeka up three you days for is

Emeka Chukwu

Yes.

Operator

B. with of Our next Ellis question comes Riley Craig from the Securities. line

may question. your You proceed with

Craig Ellis

that quarterly thanks for by part up to and execution. LoRa. question of Mohan, on the following including I and nice it's guys, just job the start wanted with was me Hey asked, about recently

like of the with COVID was after you XX% and above Europe, that above growth in that we're we're grow that me, it done we pipeline in expectation US had off LoRa of So, would and seems the of pipeline period strong acceleration. place that some LoRa mentioned is and work coming I get this excuse think And XX%, year. your a continued or entering to

now to in XX% Europe are year on adoption is The 'XX? technologies, CAGR. geographies, multi-year big acceleration look two US have the we if out fiscal above So performing wireless hitting stride part gives a above or actually calendar with curve with question accelerate the longterm can LoRa takes the we given this, the basis. their CAGR next that What of that that uptake and that when are and and 'XX

Mohan Maheswaran

business a that's last this for reasons back in whatever. good past think long the year double grow years, always and I've the expect for well the saying years, a certainly if go Craig, every last five I obviously that to over to pandemic you and I Yeah, time. of the that And related couple didn't question been it China issues

the what a But to being is, more to drive to So lot some LP little LP it's market, so technology of what's that of the best WAN I growth. the in And view I growth. market, how I would is the bit that's I about from real cautious project that you I'm my going and think a say think, adoption a of a that look nice need. the is when what at which, there's that's is most the drive a drivers LP that, it efficiencies, like a it WAN things management, utility need every around is things are see is wall, I and need environment think the LoRA day the just like going the faster to that And climate you have, change and capable going technologies. for WAN transpiring

to that consider smart segments. to don't talk be Amazon, home new the power to power starting market. In consider other the segments, we find We wireless low way LoRa we at into in addition to if We're that, we just like its wireless segments, look is Sidewalk and seeing that low be about even LPWAN.

And we CAGR that, right? sure will do we growth stick greater, make as the can XX% the think and goal our but I be so, with think execute on I

Craig Ellis

upstream gathered characterizing the that Yeah. think call, ton there. of terms a issues was admittedly, you then chain of the missed quarter I some even the there supply heard of Emeka, thought impact that part please to say in I an me I price And makes a margin Thank impact if were gross customers. out how in And increases either are some but with wanted the I or business, I you. the impact wasn't success have from you just there you correct? is clarify conveying revenue I prepared ensuring what correctly not, But in the hearing was the that the to straight. script is starting various your And of sense. that That are though that that I you do that you're outlook, of set you,

Emeka Chukwu

Okay.

have so been that price able part, And that share able increases boarding we have far We've been our saying So with the to we for them. onto able year, what to had this pass customers. that most to have I was was been that right? actually

out of go I we kind to success that news, in have not that, so going our hopeful expectation that out, should is with the the But some we're the with are past burden but plays Obviously be our new that that that that answer we prices. same expectations. see especially forward in how we the will Taiwan, that saw very our increase we giving margin wafer gross see to right. with guess impact they something I significantly customers. how is And share of that out it news was saying their of that we there, to was as new That should

Mohan Maheswaran

driving that wireless, are is our for that higher ASP's broader was Edge out, products. from pointed LoRa center an Well, and of Protection us, platforms IOT you a products growth lot The know, Protection Craig a the coming drive -- it's one of that the that. and PON related gig Tri example XX data when things you XG to the of as remember is look at Emeka new really products,

supply that we opportunity because appropriately, increases, So the advantage of sure pricing So of take think the are new out see part coming time, to same I to that's right? have that. as products at is we us chain for goal an make our we

Craig Ellis

and new Certainly input something environment. -- product I luck. guys. in much appreciate Thank Yeah. very you can the the the is good cadence this leverage new strong you

Operator

[Operator Tore instructions] Stifel. the Our next from of line with question comes Svanberg

You with proceed may your question.

Tore Svanberg

caught one was last metric the my you. gateways really The and follow-up quarters. LoRa is two I on a simply the attention of more that of on just it's metrics. that technology? quite one consumer is becoming the Mohan up gone had LoRa more dramatically a Yes. Thank and because

Mohan Maheswaran

type are of are a think helium the some home, home of I even little think smart was you're the yeah, X us, high the target the getting it's would we're you Tore. X.X a for if course, gateways, really so that see about initiatives about smart at growth that but home million much it's had year say of not gateways. we bit there. deployments already right, and say and it's million of for drives would gateways. echos a But gateways, volume to you you if aggressive consumer, in as I surprise We both which mentioned or quite

is raised deployments to we've really the beauty the But, capacity billions X.X is gateway to me to that drives key. of So just support million. me, and to about the sensors the that

used census the time catch have cases up. there and the of out just So it's infrastructure for you to question if of bottlenecks There's couple still. then a a

though. Software, there's then in census reason as question a to bottleneck, cases, opportunity get think some those removed, I the is but no a bottleneck in the and bottlenecks growth there's

Operator

remarks. over At back I'd pass there management no this the call any questions. time, to like are more to closing for

Mohan Maheswaran

In closing, we are strong pleased with results. the top first

should we provide markets planet infrastructure, adoption growth. growth long-term sustainable our in mobile smarter of mobility that increased engines As the saw and

successful We to on navigating chain human sustainability our including in and development. capital the supply have challenging expanding our been environment commitment efforts,

deliver to balanced we continued next you FY'XX. half diverse strong offering, and in we and markets of stronger relationships, product our and performance second I all Semtech your With Operator? that, customer Given a support financial to you. quarter. growing forward updating expect Thank and look record appreciate

Operator

at today's disconnect your this and you you may Thank time. conference, your concludes for participation. This lines

Semtech (SMTC) 2 Sep 212022 Q2 Earnings call transcript